as another above poster had said already use the free program "Noled". Go into the apps and then Market and search for Noled.
It's actually better than a flashing led like I had on my BB.
It's a little tricky to get it working though with the various check marks you need to do.
I posted what I did to get it working in this link at the bottom of the thread:
No LED notification.... - Android Forums
Let me know if you get it working or I might have to edit what I typed out and tweak the steps I did.
I had to restore my device last week so I had to do the NoLed set up again and I edited what I posted and I got it working again!
I used the floating envelopes instead of the colored dots.
It's cool when you have say a text message come in and you look at the black screen and a small floating envelope is moving around the black screen. Does the same for different email accounts and missed calls too only with a different icon for each alert.
It goes off too if you put the charge in your pocket or turn the screen face down on a table (uses the proximity sensor) shuts off the envelopes to save on the battery.